We are going to start a Durbin Amendment of Consumer Benefits Watch. The limits on interchange fees (aka swipe fees) built into the Dodd-Frank law are bound to have significant impact on the banks debit card programs. Since the revenue they derive from swipe fees directly funds debit card programs, we could see banks eliminate debit card services, end free checking accounts, cut rewards programs, impose debit spending limits (like savings accounts) or just start charging for debit card usage like annual fees on some credit cards.
First up in the Watch is this weeks new’s on Wells Fargo, SunTrust and JPMC. From CNN Money:
Debit card rewards programs are vanishing at several major banks.Wells Fargo said Friday that it will no longer offer its debit rewards program for new customers. This will go into effect March 27 at Wachovia and April 15 at Wells Fargo (WFC, Fortune 500), while existing customers will remain unaffected for the time being.
JPMorgan Chase (JPM, Fortune 500) notified existing customers last week that their debit rewards programs will disappear July 19. The bank eliminated debit rewards for new customers in February.
Citi (C, Fortune 500) hasn’t made any changes yet, but said it is “in the process of evaluating potential changes to our rewards programs.”
SunTrust (STI, Fortune 500), a large regional bank, has also followed suit. The bank will no longer award points to customers beginning April 15, and the points that existing customers have racked up will expire Jan. 1, 2012.
It is just a matter of time before more follow. Though it is tough to avoid saying “told you so,” I’ll refrain and just link to this 2009 article on consumer laws protecting people to death.